WASHINGTON, DC, March 10, 2021 – Today Lisa Simpson, CPA, CGMA, vice president of firm services for the American Institute of CPAs (AICPA), will testify before the House Committee on Small Business about the accounting profession’s support for Paycheck Protection Program (PPP) borrowers and the challenges small businesses and non-profits continue to face with the PPP application process.
In written testimony submitted to the Committee, Simpson spoke about the accounting profession’s many efforts – including town halls, free calculators and checklists and regular dialogue with Treasury, the Small Business Administration (SBA), members of Congress, lenders and payroll providers – to help PPP borrowers and the thousands of CPAs who serve as their trusted advisor. “Many small organizations don’t have professional finance and accounting staff in-house, so CPAs perform many vital functions including payroll processing, tax filings, paying bills, accounting, financial statement preparation, budgeting, cash flow forecasting and more,” said Simpson. “When the pandemic hit and many businesses were shuttered, small business owners turned to their CPAs for help figuring out how to pay employees, pay the rent, keep the lights on and not lose all of their investment so that when the crisis ended, the business could be in the best position possible to restart.”
Simpson also called upon Congress to extend the PPP application deadline by at least 60 days after March 31, 2021, citing urgent challenges facing small business and their CPA advisors, including:
- PPP application validation errors and hold codes that are difficult to decipher and resolve because they occur in the digital interface between lenders’ and the SBA’s platforms. (See the PPP Application Journey in AICPA’s written testimony for more information.)
- At least 65 error codes and validation checks, many of which may ultimately be incorrect, that can take two to six weeks to resolve.
- Delayed SBA guidance and new forms enacting changes in the maximum loan amount for small business owners who report their income on IRS Form 1040 Schedule C, coupled with lenders’ need to update their systems, provides little time for small borrowers to submit an accurate loan application, resolve any issues encountered in the SBA processing system and obtain a PPP loan – all while operating their businesses.
- Recent changes to the maximum PPP loan amount for small business owners is resulting in inequitable treatment of many borrowers who had previously applied for and received a PPP loan but cannot retroactively increase the loan amount to benefit from the recent changes.
- The fast-approaching April 15 tax filing and payment deadline, which layers onto the need for CPAs to advise small businesses on business relief options.
A live stream of the hearing may be found here.
- AICPA Letter to Congressional Leaders: Request for Legislative Action on Paycheck Protection Program Deadline Extension
- Press release: AICPA Says Sole Proprietors Are Unfairly Impacted by PPP Deadline and Latest SBA Guidance
- Press release: AICPA Calls for Postponement of Filing and Payment Deadline
- Press release: AICPA Submits Recommendations on ERC, Says More Guidance Needed
- Press release: AICPA Calls for PPP Deadline Extension Citing Businesses’ Ongoing Challenges and Confusion with Loan Application Processes
- Press release: AICPA Reiterates Need for Certainty and Relief
- Press release: AICPA Urges the Small Business Administration to Address Small Businesses’ Significant Challenges with PPP Loan Application System
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with more than 431,000 members in the United States and worldwide, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for its members and U.S. auditing standards for private companies, nonprofit organizations, and federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives professional competency development to advance the vitality, relevance and quality of the profession.